Can Sports Brands Enter The Yuan Universe

The world's major sports brands are still pouring into the meta universe, using digital collections to open up their own territory.

On March 21, Tebu held a new product conference and launched a digital collection running shoes named "160x metaverse". So far, the top three domestic sports brands have taken similar first steps towards the yuanuniverse.

According to incomplete statistics, Nike, ADI, puma, andama, Arthas, new balance, including Anta, Li Ning, and the latest joined special step, have made great achievements in the yuan universe through a series of actions such as joint branding, cooperation and acquisition.

Nike spent $200 million to acquire rtfkt, a company that specializes in NFT shoes. Air Jordan, the most successful sub brand, and fortnite launched virtual shoes.

Adidas launched 30000 NFT works of "into the metaverse" series, and formed a partnership with the team behind bored ape Yacht Club, gmoney and punks comic.

Puma collected a number of feline NFTs and changed the previous puma to puma. Eth on twitter, and the new name itself quickly became an NFT.

Sports brand layout NFT business mind is not difficult to understand, all business activities are ultimately for profit. At present, the concept of meta universe is only a noun concept, and launching digital collections has been regarded as a marketing behavior.

This characteristic is more obvious in domestic brands. Although it belongs to the crypto art system, the financial attribute of foreign NFT is stronger, while the domestic NFT secondary transaction is not allowed, and the meaning of NFT is mostly defined by digital collections. Not long ago, wechat publicly stated that it had taken measures to crack down on the trading of digital collections and block the public accounts of digital collection platforms for speculation and secondary sale of digital collections.

This means that the launch of "digital running shoes" at this time is not only a preparation for the future, but also a marketing trial for young users. The eagerness of the millennium old three can be understood. But is it really reliable for Tebu to establish brand interaction with young users by using NFT?

　 0. Special step can't keep up with young people

As a member of "Jinjiang Department", Tebu has the same development with domestic sports shoes and clothing brands. From acting as a factory agent to creating its own brand, it has also contracted CCTV's Golden advertising period with Li Ning, Anta, hongxingerke, peak, 361 ° and so on.

But now, it has been following Anta and Li Ning's special step of following suit. In terms of various data, it is more and more far away from each other.

In terms of revenue, Anta Sports achieved 49.328 billion yuan of revenue in 2021, and Li Ning 22.572 billion yuan. According to the latest financial report released by Tebu, the revenue has just crossed the 10 billion mark, reaching 10.13 billion yuan.

In terms of net profit, Anta's net profit was 7.72 billion yuan, Li Ning was 4.011 billion yuan, and Tebu was 908 million yuan; In terms of market value, as of March 31, Anta had a market value of HK $262628 billion, Li Ning had a market value of HK $173.759 billion (Hong Kong shares) and Tebu had a market value of HK $30.722 billion.

Macro data, although Tebu has been ranked third, but with Li Ning Anta is no longer in the same echelon. In addition, several other data can also see the embarrassment of Tebu limited to second-line brands.

First of all, in terms of the number of stores, the number of Tebu's stores in the past three years has not increased significantly compared with previous years. It mainly adopts the strategy of big stores and accelerating the opening of stores in second and third tier cities to consolidate the core users and avoid the positive rigidity with first-line brands. However, it is more and more difficult for the brand to penetrate upward.

　　 The spread of emerging things in the digital field generally follows the rule from top to bottom. The virtual value and social attributes of NFT are difficult to attract young users of the second and third tier. For leading brands, whether in the name of digital collections or NFT gimmicks are icing on the cake. Brand awareness can be seamlessly connected with digital assets, but non frontline does not have this privilege.

The slow growth of gross profit rate is another chronic disease of Tebu. According to the financial reports in the past five years, the gross profit margin of Tebu has been maintained at 40% to 45%, which is the same as 361 °. In contrast, Li Ning has risen to more than 60%, Anta is about to break through 70%; In terms of net interest rate, Tebu is the lowest among the four brands, only 10%.

Low interest rate is closely related to Tebu's brand positioning, and the marketing strategy focusing on cost performance has hindered brand upgrading. Even with the blessing of Guochao, the vast majority of Rongguang is carved up by the head. With Li Ning and Anta, who is the most proud man in the world, the special step can only get back to the second place and focus on the field of running. Sponsoring marathon events can make the special step more professional, but it can't be more fashionable.

In 2019, Tebu began to purchase high-end brands internationally, and both gasway and paladin completed the acquisition in this period. However, just like the growth and embarrassment brought by FILA to Anta, it is not helpful for the main brand to make up for the high-end short board by acquisition. The people who buy special running shoes have not changed significantly. The young people in small towns are still the core users of Tebu, and they are also the areas that NFT has not yet coerced.

One of the internal reasons for the rise of Guochao is that consumers with brand taste begin to have a greater sense of trust in domestic products. Li Ning's shoes with 1499 yuan are fried at a sky high price of 48889 yuan. Young people can't understand it, but they will realize that: in domestic brands, Li Ning can be fried. Anta has not even been able to "let young people chase" the characteristics, espu has not.

With the development of NFT, the imperfect market is coming along with the huge bubble. It is difficult to complete the unfinished lessons by the concept first virtual world. While trying to establish a sense of trust with young users, the digital running shoes of special step are also consuming the brand value of only domestic products.

　　02 、 How to cut corners with NFT?

The more complicated practical problem of Tebu is that it is facing a brand war accompanied by channel transformation.

The transformation of the traditional distribution system is a big test for every sports brand which starts from the agent factory.

Ten years ago, a huge inventory crisis broke out in the sports market, which became the last straw to overwhelm many shoe enterprises. Li Ning Anta adjusted his thinking and gradually shifted the brand wholesale mode to the brand retail mode, and completed the transformation difficultly.

But today, the wholesale mode is still one of the pillars of Jinjiang shoe enterprises. Muddy water five times short Anta, repeatedly questioned Anta and dealers collusion to create false prosperity in financial reports; Li Ning immediately fell into the inventory crisis after catching up with Nike in the Chinese market in 2011, and also relied on large-scale buyback of second-hand goods to cure chronic diseases.

Tebu's response was slower than Anta lining. It was only in 2015 that the three-year transformation plan was put into the company's strategy, and it was not until 2019 that the strategic transformation from brand wholesale business model to brand + retail management mode was completed. At this time, Li Ning has occupied the cognitive highland of national fashion with the help of New York fashion show, and came to the latest stage of domestic product competition.

　　 That is to say, when other companies start to compete in design and brand influence, Tebu's focus is still on manufacturing and sales. This also caused the gap between the special step and the head to be widened again, and it was still the role of followers.

Li Ning took the lead in playing the label of "China" and chose "Chinese Kung Fu" to cooperate with Shaolin Temple to create a new national tide IP; FILA has helped Anta complete the high-end brand layout, and has acquired gasway and Paladin to create a multi brand strategic matrix.

It is obvious that Li Ning's national tide strategy has not only seized the opportunity, but also a series of supporting actions of incubating sub brand "China Li Ning"; Anta took nearly 10 years to reverse the loss of FILA and make it a pillar of the group; However, it is very difficult to make a qualitative leap in the short term due to the special step of "rubbing against the national tide" and purchasing foreign brands in a large amount.

At this point, the problem is clear and more difficult. On the one hand, it is the channel transformation in the middle of the line, how to pass through or bypass the layers of distribution system and directly reach consumers.

On the other hand is the imminent brand upgrade, how to run into the consumption cognition of young people in the front line. So the digital running shoe "160x metaverse" was born.

Compared with the uncertainty of whether the digital collection is a meta universe pass, Tebu firmly believes that the high-level interaction between this action and the user community, as well as the resulting more direct access and brand image reconstruction.

From the choice of the first NFT, we can also see the intention of Tebu. The 160x series is the main style of special step functional products. With the help of technology as the selling point, it is one of the few high-end products with the selling price of nearly 1000 yuan.

As long as it is a place where young people gather, sports brands will not let go. At present, digital collection is a virgin land that can be reclaimed. The difficulty of special step lies in the lack of digital gene.

The main line products of special step are concentrated in the field of running, and the high-end product line is mainly functional running shoes. Sponsoring a number of Marathon events has always been a proud measure of Tebu. This is also the crux of the issue of digital collections for the form of special step more than its significance. There is a lack of meaningful objects on the product line. In the field of NFT, which aims at the scarcity and personality collection, There is no "traffic code" that Tebu can handle.

　　03 、 NFT should be self-improvement or follow the gourd painting?

NFT platform, it seems, is becoming a new social place.

That's why Nike, ADI and puma are reluctant to let go of this new opportunity. How to go out of a unique NFT development road, is also a brand must consider the problem.

Nike, which has a good sense of smell and is good at building momentum, first acquired the virtual shoe brand, and then airdropped it to the holders of "clone X" NFT in February this year, a podx for displaying NFT collection and a mysterious box called "mnlth".

Unknown. With conjecture and pursuit, the price of Nike's Mystery Box keeps rising. At present, the price of "mnlth" on opensea reaches 4.5 eth (US $12325).

ADI, the old rival, is also willing to be outdone. The 30000 original NFTs sold can be exchanged in stores. In 2022, these NFT holders will have the opportunity to obtain four exclusive physical products for free. When they choose to exchange the real products, the NFT will be destroyed and then get a new NFT with a higher number (generally speaking, the smaller the number, the higher the value). The interaction generated by this kind of launch has been continuously spread with the update of playing methods, which also improves the user stickiness of ADI again and again.

Domestic brands are limited by their limited understanding of emerging things and the niche of NFT market, so it is difficult to make a breakthrough in playing methods, which also makes the marketing activities in the name of NFT more like self congratulation without absence.

Puma, the world's third largest sports brand similar to Tebu, also has reference significance.

Through the collection of feline NFT corresponding to the cheetah image on the brand logo, it constantly attracts NFT and Web3 fans with similar taste on the social platform, and through the selective collection process of feline NFT, users can further deepen their understanding of the brand.

The reason why Tebu chose 160x running shoes also lies in that this running shoe bears the image of "running shoe professional" that Tebu most wants to create. However, the difference with puma's NFT path is that the interaction of this single product does not have the circle breakthrough and brand image brought by non concrete collection.

Puma chooses three different circles: cat lovers, puma users and NFT fans, and the chain reaction brought about by this. Special step only "running shoes - users" connection between two points, it seems that the communication effect will be greatly reduced.

　　 It may be the only choice for special steps in a long period of time to explore the suitable rhythm on the demonstration of many leading brands.

It can be reasonably speculated that Chinese players will sooner or later introduce NFT to exchange physical products. However, there are too many ways to exchange a collection, a joint name and a exchange. New users also need to constantly stimulate and maintain fomo mood (fear of missing out refers to the anxiety of always worrying about what to lose or miss).

How can NFT, which is not allowed to be traded twice, bring value to users? Domestic brands are faced with the same problem, especially complicated to be solved. The strength of the non front line is both a cause and a result. There are too many leaders and the following strategy can only be carried out.

Anta and Li Ning are no longer "poor boys", but it is still difficult to create an IP with enough influence and wide resonance. NFT sweeps the business world, rules, crowd, play... Brands are facing more than one mountain.